Business owners should prepare now as Self Assessment deadline looms

If you’re self-employed, a company director, or have to fill in a tax return for any other reason, you have just 10 days left before the annual self-assessment deadline arrives on 31st January.

According to HMRC, around 11 million people are expected to complete a SATR for the 2012/13 tax year. If you’re a sole trader, your income tax for the year is calculated via the self-assessment process, and all company directors have a complete a form each year, regardless of income levels.

Controversially, over one million traditional employees will also have to complete tax returns from this year onwards, as a result of changes to the Child Benefit regime, whereby families where one partner earns £50,000 or more per year lose their entitlement, and have to repay any benefits received… via self-assesssment.

No excuses for filing late

HMRC doesn’t offer any leeway when it comes to missing the 31st January deadline. Earlier this year, it published a list of mildly amusing excuses provided by late payers in the past, including, “My wife won’t give me my mail” (from a sole trader), and “My bad back means I can’t go upstairs. That’s where my tax return is”.

Aside from the occurrence of rare, ‘unforeseen’ events, if you miss the deadline, you will be penalised – both for failing to submit the return on time, and also financial penalties if you fail to pay any tax liabilities owed for the previous tax year.

If you miss the 31st January deadline, a standard £100 penalty is applied immediately, and don’t forget – this penalty still applies even if you have no outstanding tax to pay for the 2012/13 tax year.

An additional £10 daily penalty will be added to this initial charge, up to a maximum of £900. Further penalties apply after 6 and 12 months.

The penalties for failing to pay any back taxes by the deadline date are; 5% of the total unpaid tax at 30 days, 6 and 12 months.

Make sure you meet the deadline

As the paper deadline expired on 31st October, you must now file your SATR online.

If you’re not already signed up to HMRC online services, you will need to apply for an Activation Code first. This will arrive via standard post, and can take at least a week to arrive. You can find out more here.

Alternatively, ring the HMRC Self Assessment helpline on 0300 200 3310.

And, for the lowdown on self-assessment process itself, read our concise guide here.